MUTARE: The decision to consolidate diamond mining killed the sector and government is currently re-engaging the Chinese companies that were operating in Marange to reach an amicable settlement, finance minister, Patrick Chinamasa, has said.

Chinamasa said this while addressing Confederation of Zimbabwe Industries (CZI) business meeting in the eastern border city at the weekend.

According to the minister, the diamond mining sector is “dead” and is currently not contributing meaningfully towards the country’s foreign currency earnings.

He said unlike tobacco, chrome, gold, platinum and nickel which have contributed immensely towards Zimbabwe’s foreign currency earnings, the diamond sector has proved to be “dead”.

“As of now the diamond sector is dead. I used to visit Mutare during the hype of diamond mining and one could feel the diamond money. We need to come back to that situation again,” said Chinamasa.

He said the money can be felt in Manica and Chimoio in neighbouring Mozambique.

The minister said he was working hard with mines minister Walter Chidhakwa to turn around the fortunes of the diamond sector.

“The issue that got the sector to collapse is essentially that we felt this sector was not contributing and we decided to consolidate it. In other countries like Botswana, Namibia and Angola the State is the dominant player in the mining of diamond,” said Chinamasa.

He added: “Now, arising from the decision we took there was a lot of litigation. Minister Chidhakwa and I we are trying to engage the Chinese companies that were operating there so that we reach an amicable settlement and move on. The discussions to that effect have started,” said Chinamasa.

The minister also said ever since he became a Finance minister in 2013, the diamond projection was never met.

“Since I became the finance minister, in 2014 budget, I projected 14 million carats but I never got anything more than 3 million,” said Chinamasa.

He said people in Manicaland should understand that the DNA of local diamonds is 10 percent gems which fetches $80 per carat on market, 25 percent near gem ($15-50 per carat) and 75 percent industrial diamonds with a value of $6-10 per carat.

“We are not like Botswana or Angola with 96 percent gem. If we go into Kimberlite mining may be we may have greater percentage of near gem or gem,” said the minister.

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In 2015, government kicked out companies that were mining diamonds in Chiadzwa as it pushed for consolidation, but some firms rejected the move and sued the state.

At the time, there were claims that large sums of money were lost through corruption with Mugabe telling the nation that as much as $15 billion was unaccounted for.